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September 25, 2014 --- Vol. 08, No. 39September 2014

Yukon Territory

ZINC/SILVER – Manson Creek Resources Ltd. and Guatavita Gold Corp. Sept. 22 reported assay results from the first phase of drilling at the Guaman project, Yukon Territory. All four holes of this inaugural drilling at Guaman intersected anomalous values of silver and zinc throughout the sulfide-bearing shale units and in the contact zone above the underlying volcanic units. Manson Creek President Jean-Pierre Jutras said, “The determination that significant amounts of zinc and silver throughout the rocks underlying numerous gossans on site is another element that supports the continued search for potentially economic mineralization at our Guaman project. While zinc was present and elevated throughout important intervals, no nickel was found in the core analyzed, indicating that one of the sources or units responsible for the large coincident zinc and associated nickel soil anomaly found at surface has remained elusive through this phase of work. It can be typical of the zonation in syngenetic systems for zinc, silver and barium to occur on the fringes or distally to zones of more massive mineralization. Our team will be going through the data to identify any other vectors that may assist in finding higher grade zones or feeder structures in the system.”

COPPER/GOLD/SILVER – Capstone Mining Corp. Sept. 22 said it has received an amended quartz mining license for the Minto North Deposit as outlined in its phase 5-6 pre-feasibility study. It has not, however, received its water use license amendment, which the Yukon Water Board believes is required in order to begin pre-stripping of Capstone’s Minto North pit. Underground mining and milling operations are not affected and production guidance at Minto for 2014 is unchanged. The mill will process underground ore and stockpile for the remainder of the year as planned. The 2014 mine plan submitted in the license applications did however call for pre-stripping of the Minto North open pit, starting in September. The delay in starting the pre-stripping of Minto North has resulted in a revised mine plan which will bring forward fully permitted underground ore from Area 118, starting later this month, to maintain full mill production and partially offset the 2015 shortfall in ore from the Minto North open pit. Production in 2015 is not expected to be materially different than 2014, however the most significant production from Minto North will shift from 2015 to 2016. As a result of the delay in pre-stripping, the surface mining contractor will be downsizing its crew at Minto, affecting about 50 people. This downsizing is in addition to the 44 jobs affected with the surface mining contractor in January 2014, when Minto slowed open-pit mining to better align with the expected permitting timeline. Following the downsizing by the surface mining contractor, total direct and contract employment at Minto is about 250 people. Capstone’s 171 employees and present underground mining contract employees are not affected. Support contractor positions will be evaluated based on the reduction of personnel for the mining contractor. “We are pleased to have received our Quartz Mining License amendment, however we believe the most prudent course of action is to delay the Minto North pre-stripping until we receive our WUL,” said Capstone President and CEO Darren Pylot. “There is no change to our copper production guidance at Minto for 2014, and no material difference expected in 2015. The most regrettable result is job losses at our surface mining contractor. We will continue to work closely with the Water Board staff in order to be in a position to recall our surface mining contractor as quickly as possible.” The Minto Mine commenced operations with a six-year mine life in 2007 from the Main pit, the only known ore deposit at that time. Since then, successful exploration has extended the mine life an additional nine years to 2021, assuming permits are received. Under the regulatory process in Yukon, new permits are required each time additional reserves are brought into the mine plan. Capstone made application to the Yukon Environmental Socio-Economic Assessment Board for all remaining identified copper reserves on the property in July 2013 and YESAB recommended in favor of the proposed continuation of operation of the mine in April. Application was made for the amended quartz mining and water use licenses on July 2, 2014.


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